Sales and Marketing Alignment

In a research study titled, “2016 B2B Sales & Marketing Collaboration Study,” Samantha Stone and The Marketing Advisory Network found that the misalignment of sales and marketing objectives remains a key problem for B2B companies.  Although this has been a topic of discussion for several years now, misalignment remains a key stumbling block to meeting revenue objectives.  Finger pointing between sales and marketing has long been a blogging meme.

When asked about whether marketing co-workers were doing a “superb job of supporting sales efforts,” sixty percent of marketers agreed while only twenty percent of sales executives agreed.

Other signs of disconnection between the two parties:

  • Only twenty percent of marketers believe that there is a 95% follow up on marketing generated leads while only half of sales executives believe a 95% follow up rate is maintained within their department.  Overall, 57% of respondents believe that no more than 85% of marketing leads are acted upon by sales.
  • Marketers have little confidence that sales reps are using the tools they develop for sales.  While only 15% of marketers believe their tools are broadly adopted (“virtually 100%”), over half of sales reps believe the tools are being fully deployed.
  • While fewer than twenty percent of marketers believe that sales is rewarded for supporting marketing objectives, 55% of sales teams believe their rewards are aligned with marketing.
  • Firms that did not share key performance indicators between sales and marketing were half as likely to exceed revenue targets.
  • Marketing ownership of pipeline acceleration is critical to meeting revenue targets.  “Organizations that exceeded revenue goals in the last 12 months are 3X as likely as those that miss revenue goals for marketing to “own” pipeline acceleration (not just lead generation),” said Stone.

“It’s common sense that organizations that rally together around shared goals will drive more efficiency than those where different functions are at odds with each other. Yet, most sales and marketing teams struggle with achieving this ideal.  That’s almost terrifying given we know fully integrated companies are more profitable, drive faster growth and make happier customers,” said Stone.  “Sales and marketing leaders are smart, yet almost every organization I walk into has some level of unhealthy tension between the two groups. It doesn’t seem to matter the size of the company, the industry they serve or how fast they are growing. In fact, it’s so common we accept it as inevitable.”

Sales and Marketing SLAs (Source: Marketing Advisory Network)
Sales and Marketing SLAs (Source: Marketing Advisory Network)

The study also found that setting Service Level Agreements (SLAs) between sales and marketing are highly correlated with revenue performance.  Firms that took simple steps such as defining lead scoring criteria and lead follow up timeframes were much more likely to exceed goals than fail to do so.  Of the six SLA goal categories defined by Stone, five were associated with “exceeded revenue goals” more commonly than missing revenue goals by more than ten percent.

The one goal that was not associated with outperformance, agreeing on the “number of new contacts added to the database by sales,” doesn’t address the mix of marketing and sales generated leads.  If we assume that there is an optimal percentage of sales generated leads, then agreeing on a percentage that is significantly above or below the target would be sub-optimal.  Absent a way to determine this optimal mix, setting an SLA on sales generated contacts could easily result in too much or too little time spent on contact identification.  If the number is too high, then reps are likely to add contacts of little value to the CRM so as to reach numeric targets.  A smart SLA would be based upon an analysis of the cost of generating sales contact records against the benefit of adding additional contacts.  As such, setting an analytics-free numeric target is no better than having no SLA at all and allowing each rep to determine their optimal contact discovery level.

Teams that perform best, document more service level agreements between sales and marketing than those teams that simply meet or miss revenue goals,” said Stone.  “Those that exceed revenue goals even collect data points such as win/loss data in a formalized manner.  Perhaps the most simple practice they follow is not only agreeing on lead scoring critical for sales follow up, but on time from lead assignment to follow up. It’s this closed loop accountability that clearly makes a difference.”

Finally, one simple step for improving revenue is for marketing to attend sales meetings.  The study found that B2B organizations which outperform on revenue are twice as likely to have marketers attend customer and prospect meetings than firms that fail to meet revenue targets.  Furthermore, marketing departments should be surveying the sales team on tools.  Stone found that firms “that exceed revenue goals are 3.1X as likely as those that just meet revenue goals to survey buyers when evaluating sales tools and 14X as likely as those that miss revenue goals.”

Tibor Shanto, Principal of Renbor Sales Solutions, calls for improved cooperation between sales and marketing under the leadership of a Chief Revenue Officer:

I have always seen sales and marketing as being on a shared mission and fighting the same battle. Like the military, to succeed, marketing has to provide air cover for the ground troops, namely sales, and this requires complete coordination, planning, execution, and review. This needs to extend from lead generation through all stages of the sale. At each stage, marketing offers up different coverage based on the feedback from sales. And sales needs to be sure to provide that feedback every step of the way or the air cover may miss the mark. While each branch of the military has their command, the overall effort is led by the commander. That’s why I am a fan of companies having a Chief Revenue Officer, rather than a distinct VP Marketing and VP Sales.

It is through a recognition of shared goals subject to shared metrics and feedback loops that firms can obtain improved performance from the two departments that own revenue generation.

The research was sponsored by QuotaFactory.

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